Daycare Business Loans

What are daycare business loans?

A daycare business loan is any form of financing you borrow to fund your daycare business, whether this be to cover everyday expenses, renovations, or purchase of a new location.

In most cases a daycare business loan is a lump sum you borrow and pay back (plus interest) over a term of months or years. Most daycare business loans can be used for any business purpose, but some are tied to certain purchases.

Best Daycare & Child Care Business Loans

OnDeck

OnDeck

✔ Funding: Borrow $5,000 - $250,000
✔ Minimum Credit Score: 600
✔ Loan term: up to 36 months
✔ Funding turnaround: as soon as same business day

OnDeck offers fast business loan options such as term loans, business lines of credit, and SBA PPP loans and funding as fast as 24 hours. Minimum requirements include: at least 1 year in business, 600 credit score, $100,000 in gross annual revenue and a business checking account.

COMPARE LOANS

OnDeck is a popular short-term business loan provider. The company is popular due to its fast funding; some borrowers often see the funds the same day. They accept lower credit scores than other lenders but their interest rates vary notably, from 9% up to 99%.

• Minimum credit score: 600
• Minimum time in business: 1 year
• Minimum annual revenue: $100,000
• A minimum of two years must have passed since a bankruptcy
• Requires personal guarantee and business lien

BlueVine

BlueVine

✔ Funding: Borrow $5,000 - $250,000
✔ Minimum Credit Score: 600
✔ Loan term: 6-12 months
✔ Funding turnaround: 24-48 hours

With BlueVine, borrowers can get approval as fast as 24 hours and obtain a business line of credit for short term capital needs while only paying interest on the funds you borrow.

COMPARE LOANS

BlueVine offers business lines of credit with rates starting at 15%. This lender typically sets up lines of credit quickly - in as little as 12 hours in some cases. Repayments are weekly and you must have been doing business for six months before you’re eligible.

• Minimum credit score: 600
• Minimum annual revenue: $120,000
• Requires personal guarantee and business lien
• Weekly repayments

Kabbage

Kabbage

✔ Funding: Borrow $1,500 - $150,000
✔ Minimum Credit Score: 640
✔ Loan term: 6, 12 or 18 months
✔ Funding turnaround: As soon as 1-3 business days

Kabbage offers borrowers a credit line up to $150,000 with monthly repayment options and no prepayment penalties. Approval as fast as same business day.

COMPARE LOANS

Kabbage offers flexible payment options and fast funding. They lend between $500 and $250,000 on a short-term basis of 6 months to a year. Kabbage also offers a business line of credit if that’s a better fit for your business.

• Minimum credit score: 640
• Minimum time in business: 1 year
• Minimum annual revenue: $50,000
• A minimum of one year must have passed since a bankruptcy

How can a daycare business loan benefit your business?

One of the most obvious ways a daycare business loan can benefit you as a business owner is the immediate capital you’ll have access to. Starting and running a daycare is an expensive task and your business loan can serve several functions. Here are a few things financing can be used for:

• Purchasing a daycare franchise or real estate for your daycare facility
• Acquisition of an existing daycare business
• Renovating or repairing your site
• Purchasing furniture, supplies, food, and entertainment products
• Manage cash flow
• Paying staff

Types of daycare business loans

Here are some of the most commonly-used types of daycare business loans:

• Term loans: Term loans are the most popular form of borrowing if you’re looking to borrow a lump sum. This is the traditional form of loan where you borrow a lump sum and pay it back weekly or monthly over a short, medium, or long term. This can be as little as 3 months or as long as 10 years. While term loans are available from banks at low interest rates, only those with excellent credit, high turnover, and a long time in business are likely to qualify. If you don’t think you’ll qualify for a bank loan, a term loan from an alternative lender online is the best option. There are plenty of lenders to choose from with varying qualification requirements and terms, so you’ll be able to find the right loan for you.
• Business line of credit: A business line of credit acts like a credit card, in that you are given a credit limit and can borrow any amount up to that limit. You only pay interest on the money you’ve actually borrowed, and you can use credit again once you’ve paid it back. This is a particularly good option for those looking for flexible borrowing.
• SBA loan: SBA loans are particularly desirable because they’re guaranteed by the Small Business Administration, which makes the lenders they work with more willing to lend large amounts of money and at better rates and terms. All SBA loans have an interest rate between 2% and 13%, so they’re some of the lowest on offer besides bank loans.There are 3 types of SBA loan on offer, the 7(a) loan which is the most popular and most versatile, the 504 loan, which can be used to purchase major assets (such as real estate), and microloans. The 7(a) and 504 programs both offer loans up to $5 million, while the microloan program offers loans of up to $50,000 through local lenders and organizations. Most SBA loans have strict requirements, so you’ll generally need to have good credit, annual revenue over $50,000, and have been in business for at least 2 years to qualify.

Alongside the primary types of loans available to daycare businesses, you could also consider a commercial real estate loan if you’re looking to buy or renovate real estate. Another option is a business credit card, in which you only pay interest on the money you borrow. It might also be a good option if you’re a new business and don’t qualify for a small business line of credit.